7 Tips for Managing Your Retirement Savings

When it comes to taking care of your future, caring for your retirement savings should be at the top of your list. It’s never too early, or too late to begin managing your savings properly. There are many things you can do to not only manage your account but to boost it and get it ready for your days relaxing in the sun.

The most important thing you can do is make the management of your savings a habit. Getting into a schedule of regular checkups and care for the account is important. You need to monitor how much is accruing and what your plans for the money are.

Having a good plan in place for withdrawal is important. There is no simple solution when it comes to taking care of your savings, so do what you think will be best for your situation.

We’ve done the research for you and have found the best tips for managing your golden year’s money:

1. Make a Plan

First, set up a withdrawal plan for your retirement savings. Some financial advisors will encourage you to withdraw around 4 percent of the value of your total savings, and put 3 percent of that towards a sort of raise to keep up with inflation.

This will make your money last a little longer, and you will be able to decide what investments decisions are worth your time. The goal here is to increase the value of your savings or have enough income from other investments that can help you keep up with inflation.

2. Pick the Correct Withdrawal Rate

When it comes to the ultimate security of your retirement savings, you need to figure out exactly how much you can spend each year without going completely broke. It is time to consider your portfolio, bonds, mutual funds, etc.

You need to set a spending rate that will work like a speed limit does on a highway. If you use your money wisely, you’ll be able to do all the traveling and leisure activities you desire.

3. Don’t Go Over The Limit

If you do this step carefully and analyze your funds, you will be able to manage your retirement savings so well that you’ll end up living solely on whatever money comes to you from your pension and social security.

If you get a little careless, that’s okay- but you will end up using your savings to continually pay whatever monthly bills you have. Install some spending rules that you serve as a guide. This way you won’t use up all of your money right when you retire.

As a general rule, a 4% spending rate of your total savings for your first year is normal. For the following years, take that amount and then include inflation.

4. Bucket List

Now that you have a rate that works for you, it’s time to put a program in place that will help you know exactly what your investments and risk levels are. It is time to use “bucketing”.

“Bucketing” is putting your money into a variety of buckets, each one designated for a different purpose or benefit. There might be one for spending cash. Perhaps there is one for stock funds and one for bonds.

Your spending cash bucket is going to be your safety threshold. It should give you enough wiggle room and help you pay for all of your normal living expenses for a few years.

Keep an eye on your bucks, because when they run out they can’t just be replenished. You aren’t working anymore, and your retirement savings isn’t going to grow too much.

5. Evaluate Your Stock, Bond Buckets, and Retirement Savings

Whatever money you don’t need to pay for your living expenses should be split into two groups: bonds and stocks. How much you put in each group will be a very personal decision. You need to consider your risk levels.

Analyze what you can and can not afford to risk. Don’t do anything that will make your time living on your retirement savings uncomfortable. Be wise and financially savvy.

6. Go Simple

The best way to manage retirement savings is to be simple. If you don’t have many funds, then it will be easier to manage the ones you do have. As you get older, you might not be interested in switching money around and trying to make sure it’s in the perfect spot.

Use bucketing to ensure you’ve got the right amount of cash for your yearly withdrawals, bonds for liquidity, and a safety net. Stocks can also get you through a few more years of retirement.

Regardless of what you do, just keep it simple. If you need help keeping things simple, hire the pros like IRA Financial Group to help.

7. Take Advantage of Catch-Up Contributions

Taking advantage of catch-up contributions is especially important if you are age 50 or older. One of the biggest benefits of saving from an early age is that people continually contribute to their 401(k) plan or an IRA. However, the amount you can contribute is limited.

While there might not be that many benefits of turning 50, there are definitely benefits where your savings are concerned. Once you turn the age of 50, you will be allowed to extend beyond the normal limitations and start to catch-up on any missed years of 401(k) or IRA savings. This is your time to regain a few years back of savings that you missed when you were spending those funds on bottle service.

These catch-up programs can help you get your retirement savings to a comfortable place. They can help you boost your retirement quickly and efficiently. While there are still limits for those over the age of 50, they are much bigger limits than for those who are contributing under the age of 50.

Rein It In

As you take a careful look at your budget and your savings, you might find that you need to rein some things in. This will help increase your savings, and let you live comfortably for years to come.

Being able to determine where your money is going and how much you can spend will give you peace of mind. For more advice on retirement, learn more here.